Hostelworld issues profit warning after disappointing summer bookings

Hostelworld counted the cost of disappointing summer bookings, as it saw shares slide after warning that profits will be lower than predicted.

The online hostel booking platform warned investors that earnings for 2019 are expected to be worse than the previous year due to higher costs and the "highly competitive" market.

The firm said that bookings for the peak summer period were "somewhat lower than anticipated", denting its financial performance over the first half of 2019.

Hostelworld saw group revenues for the six months to June slide 8.9% to €38.8m.

Total gross bookings for the period slipped to 3.8 million for the period, from four million over the same period in 2018.

During the half year, adjusted earnings before tax and interest fell by 15% to €8.9m.

However, the company said that it is has made "good progress" on its "roadmap for growth" strategy plan after investment to improve the experience of users.

Gary Morrison, chief executive officer of the company, said: "The market remains highly competitive and as noted in our annual meeting statement, this continued into the peak summer period.

Coupled with higher-than-anticipated inflation in performance marketing channels, and the financial effect of increased investment in our 'roadmap for growth' during the second half of the year, means that earnings for the full year are likely to be below 2018.

"We continue to operate in an attractive and growing market, and I remain confident about the opportunity to capitalise on the significant growth opportunities we have identified."